Please Redistribute
December 9, 2004
Nelson Phelps, President and Executive Director
AUSWR Board Members and General members
This is an update concerning the many securities lawsuits pending against Qwest.  As you know from reading my prior reports, there are two primary groups of securities cases pending - federal court cases and state court cases.  All federal case have been consolidated into Denver Federal Court and are assigned to Federal Judge Robert E. Blackburn and Magistrate Judge Craig B. Shaffer.  The state court cases, namely lawsuits by CalSTRS, the State of Illinois, the State of New Jersey and Louisiana Teachers, are pending in different state courts.
In my report sent March 5, 2004, I included a copy of the 5th Amended Consolidated Complaint filed on February 6, 2004, by the team of securities lawyers suing Qwest and former officers and directors in the federal shareholders lawsuits pending in Denver Federal Court.  The filing of that new complaint resulted in the defendants filing another round of "motions to dismiss."  No discovery is allowed to be conducted in federal securities cases while motions to dismiss are pending.
On November 30, 2004, Federal Judge Blackburn issued his order ruling on the motion to dismiss filed since March.  I have attached hereto in Adobe PDF file format a copy of his 24 page order.  While Judge Blackburn dismissed some of the claims first asserted in the March filing, and ruled he would not allow additional defendants, he did not dismiss the primary case pending against Qwest, former officers and directors, and Arthur Andersen.
Now, since there are no more pending "motions to dismiss," the litigants can conduct formal discovery, including all important depositions.
Today, Magistrate Judge Shaffer held a scheduling conference for over two hours for the purpose of working out a coordinated plan to be used by all the many attorneys in the dozen or so federal court cases.  There were more than 25 attorneys personally present for today's court conference and several dozen more attorneys were listening in by telephone.
The defendants were ordered to file "Answers" to the 5th Consolidated Amended Complaint no later than January 14, 2005.  It remains to be seen whether any of the named defendants will file cross-claims against each other.
Although most of the federal court cases have been pending for three full years, there have not been any depositions taken thus far.  In other words, none of the defendants, including former CEO Joseph Nacchio, have had to answer the Plaintiffs' questions under oath.
Since discovery depositions can, now, go forward, Magistrate Judge Shaffer established the following rules, among other parameters:  Plaintiff side can take 80 depositions starting on February 21, 2005, and ending August 31, 2005, a four month period.  The depositions must either take place in Denver, the deponent's place of business or the deponent's residence.  All litigants in any of the coordinated cases can appear with their counsel and participate, unless the deponent can show grounds for a protective order.  No deposition can last more than 7 hours, absent some showing of good cause.  For example, former CEO Joseph Nacchio cannot be questioned more than 7 hours.  Therefore, the many attorneys are going to have to work together, carefully plan their questions and exhibits, and use the limited time wisely.
At one point during today's court proceeding, Magistrate Judge Shaffer stated:  "I'll be shocked if any of these cases ever go to trial.  I will fall down in stunned amazement if any of these cases ever go to trial."  It is true that very few securities cases ever go to trial, as they are settled far in advance of the trial date.
During today's court proceeding, none of the attorneys or litigants said anything about the progress of the ongoing settlement discussions.
Curtis L. Kennedy
8405 E. Princeton Ave.
Denver, CO  80237-1741
Tele: 303-770-0440
Attachment    (November 30, 2004 Order concerning motions to dismiss - 24 pages)
 Right-click here to download pictures. To help protect your privacy, Outlook prevented automatic download of this picture from the Internet.

Please note that all PDF-formatted documents, such as the attached document, require Adobe Reader for viewing. In order to view the attachment, you must have Adobe Reader Version 6.0. You can obtain a free download at: